Cloud Stocks: 2 Haves and 2 Have-Nots

The broader market opportunity is huge, but not every company is ready for the big leagues

Not Ready: Tremor Video

Date of IPO: June 26, 2013Return: -18%

Tremor Video (TRMR), which operates a video ad network, had a rough IPO. The company priced its deal at $10, which was below the expected $11-to-$13 range. By the end of its first day of trading, shares were off by 15%.

And this happened despite Tremor being a top company in its industry.

TRMR’s core technology, called the VideoHub, allows customers to display their ads across desktop computers, smartphones, tablets and even connected TVs. The network includes about 500 websites and mobile apps, with more than 200 involving exclusive partnerships. And Tremor is going after substantial growth opportunities; eMarketer estimates that the video market will grow by 29% annually to $8 billion by 2016.

So why the disappointment from Wall Street?

One problem might be Google (GOOG). With its ownership of YouTube and the Android mobile operating system, the company is poised to squeeze large amounts of the profits from the market.

But perhaps the biggest issue is the fact that there’s little differentiation between Tremor and the spate of other ad networks, including Hulu, BrightRoll, Adap.tv, Videology and YuMe (YUME). Getting public investors’ attention is difficult enough, but even more so when it’s difficult to show how your product stands out.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

Tom is routinely quoted in the media about upcoming deals with his interviews on CNBC and Bloomberg TV, but he is eager to take your questions too. You can message him on Twitter at @ttaulli. And feel free to weigh in via the comments section on any of his IPO Playbook posts.